Sensex, Nifty hover near highest point of the day

Indian equity benchmarks continued their firm trade hovering near the highest point of the day in late morning session as fresh buying by investors led to widespread gains. The buying was witnessed not only by retail investors but domestic institutional investors too contributed to the recovery. Foreign Portfolio Investors (FPIs) stood net buyers in domestic equity market on Friday as they bought shares worth Rs 24.21 crore with gross purchases and gross sales of Rs 5,034.59 crore and Rs 2,010.38 crore, respectively. The rupee opened higher against the dollar on account of selling of American currency by banks and exporters amid growing expectations of a US interest rate hike this month. Traders were getting encouragement with the GST council moving a step closer towards implementing the Goods and Services Tax (GST) from July 1, approving two crucial supporting legislations of central GST law (CGST) and the integrated GST (IGST) law for this ambitious tax reform. It will again meet on March 16, to clear the state GST law (SGST) and the union territory GST law (UTGST). Separately, some support also crept in with the news that foreign investments in the services sector increased 77.6 percent to $7.55 billion in the first nine months of the current fiscal, helped by government steps to improve ease of doing business.

Traders were seen piling position in Energy, Oil & Gas and Power stocks, while selling was witnessed in Consumer Durables and IT sector stocks. Information Technology (IT) stocks were under pressure as uncertainty over the sector worsened with the US suspending the processing of premium H1B visas citing a backlog of applications. The move would adversely impact domestic software exporters as well as multinational firms who send engineers to work on projects in the US. In scrip specific development, Dredging Corporation of India was trading firm after reports that the government is looking to sell 51% stake in the company. The government currently holds 73.47% stake in the firm that provides dredging services to seaports, while state-run financial institutions hold 13% stake. Cipla was trading in green on plans to sell its animal health business in South Africa and Sub-Saharan Africa for a consideration of about Rs 191 crore.

On the global front, Asian shares were trading mostly in green, amid a missile test by North Korea. Japan said three missiles landed inside its exclusive economic zone and that it would not tolerate the hermit state’s provocative actions. Premier Li Keqiang sounded a cautious note at the annual meeting of parliament that began Sunday, and said that China would expand its economy by around 6.5 percent, compared to the growth target of 6.5 to 7 percent set last year. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,950 and 29,900 levels respectively. The market breadth on BSE was positive in the ratio of 1497:856, while 151 scrips remained unchanged.

The BSE Sensex is currently trading at 29050.54, up by 218.09 points or 0.76% after trading in a range of 28856.12 and 29054.72. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.58%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were Energy up by 2.06%, Oil & Gas up by 1.27%, Power up by 1.09%, Auto up by 1.08% and PSU up by 1.03%, while Consumer Durables down by 0.08% and IT down by 0.01% were the only losers on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.66%, Power Grid up by 1.70%, NTPC up by 1.57%, Asian Paints up by 1.31% and Bajaj Auto up by 1.20%.

On the flip side, Sun Pharma down by 0.70%, TCS down by 0.60%, Hindustan Unilever down by 0.48%, GAIL India down by 0.32% and Wipro down by 0.22% were the top losers.

Meanwhile, moving a step closer towards implementation of the goods and services tax (GST) from July 1, the GST council chaired by Union finance minister Arun Jaitley approved two crucial supporting legislations of central GST (CGST) and the integrated GST (IGST) laws, for this ambitious tax reform.  The council will take up for approval the State GST (SGST) and Union Territory-GST (UT-GST) laws at its next meeting on March 16. It has also decided to levy a 5 percent GST (2.5 percent by Centre and 2.5 percent by state) on small hotels, restaurants and dhabas with an annual turnover of up to Rs 50 lakh.

Finance Minister Arun Jaitley has said that the CGST, which will give powers to Centre to levy GST on goods and services after union levies like excise and service tax are subsumed, and IGST that is to be levied on inter-state supplies, will go to Parliament for approval in the second half of the Budget session beginning March 9. He further said that the SGST, which will allow states to levy the tax after VAT and other state levies are subsumed in the GST, will have to be passed by each of the state legislative assemblies and UT-GST will also go to Parliament for approval.

Jaitley also said that the model GST Law will have a clause to enable levy of up to 40 percent tax (20 percent by the Centre and an equal amount by the states) but the effective tax rates will be kept at the previously approved levels of 5, 12, 18 and 28 percent. He added that this is being done to obviate the need for going to Parliament in case the levy is to be raised on certain goods and services. This will also help in a scenario where the cess on de-merit goods being proposed to compensate states for loss of revenue from GST, is to be merged with the tax rate itself.

The CNX Nifty is currently trading at 8959.95, up by 62.40 points or 0.70% after trading in a range of 8914.00 and 8962.10. There were 38 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 3.58%, IndusInd Bank up by 1.99%, Power Grid up by 1.68%, Asian Paints up by 1.41% and NTPC up by 1.38%.

On the flip side, Grasim Industries down by 1.69%, Idea Cellular down by 1.31%, Aurobindo Pharma down by 0.93%, Zee Entertainment down by 0.87% and Sun Pharma down by 0.76% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 2.1 points or 0.1% to 2,080.85, Jakarta Composite increased 3.16 points or 0.06% to 5,394.38, FTSE Bursa Malaysia KLCI increased 10.96 points or 0.64% to 1,719.34, Shanghai Composite increased 11.15 points or 0.35% to 3,229.46, Taiwan Weighted increased 23.24 points or 0.24% to 9,671.45 and Hang Seng increased 75.83 points or 0.32% to 23,628.55.

On the other hand, Nikkei 225 decreased 93.59 points or 0.48% to 19,375.58.